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Attitudes have changed over the past 12 months, survey finds, with most expecting to need more savings.
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Inflation ‘forces pushback of retirement plans’
30 November 2023
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Inflation is forcing most people to work longer, save more and push back their retirement plans with 40 per cent now pessimistic they will be able to quit work at all, according to a survey by global investment manager MFS.
The MFS Global Defined Contribution Survey found Australians were aligned with workers in the US, UK and Canada in changing their attitudes over the past 12 months with inflation having a greater impact on retirement confidence than the events of the past three years.
MFS managing director and head of Australia and New Zealand Joshua Barton said the findings had implications for the $3.5 trillion superannuation sector.
“We need to continue to open pathways to advice across the superannuation system, including through superannuation funds and employers and new technologies, to support Australia’s sophisticated yet smaller advice market,” he said.
“This is particularly important as the industry readies for superannuation’s historic transition from savings accumulation to income drawdown; we must embrace the regulatory and legislative relief changes geared towards delivering better financial outcomes that can help insulate retirees, current and future, from market cycle stress.”
The survey, which quizzed 1,000 Australians, found only 26 per cent were confident they would be able to retire at the time and age of their choosing.
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The age of expected retirement remained unchanged, at 66 years, but almost seven out of 10 now envision a more gradual transition in which they reduce hours or switch jobs.
The vast majority (74 per cent) said they would now need to save more than they previously planned, 61 per cent said they would need to work for longer and 40 per cent no longer see themselves as retiring at all.
Most had also adjusted their investment thinking and opted for a more conservative approach.
The survey found inflation was having a greater impact on retirement confidence than COVID-19 and most Australians wanted in-person advice and online support for retirement saving and planning.
One-third wanted a human adviser, more than a quarter were using online tools such as retirement calculators while there was “increasing interest in online financial publications, videos, and podcasts”.
Robo-advice was struggling for traction at 5 per cent while 13 per cent shunned any form of advice.
The survey, conducted by an independent researcher, quizzed 1,000 people in each of the US, UK, Canada and Australia who were actively contributing to a super fund or its equivalent.
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